Recruiting Internal Auditors: The Effects of Using the Internal Audit Function as a Management Training Ground and Performing Consulting Services

Abstract:     
This paper examines factors that influence job applicants’ willingness to apply for positions in internal auditing. We predict and find evidence that job applicants are dissuaded from applying for internal audit positions. Through additional analysis, we discover that this phenomenon is most prevalent for applicants with business experience as experienced applicants are 33 percent less willing to apply for a position if it is labeled as “internal audit” versus “accounting.” In addition, we find that the only experimental condition that increases interest in applying for an internal audit position for experienced applicants occurs when the position advertises the combination of (1) a short stint in internal auditing and then a move from internal audit into a management position and (2) work primarily related to consulting services rather than assurance services. The results should prove informative to practitioners, internal audit professional organizations, and business professionals concerned with high quality corporate governance.

Number of Pages in PDF File: 42

Keywords: Internal Audit, Hiring Decisions, Management Training Ground, Recruiting, Assurance Services, Consulting Services

JEL Classification: M4, M40, M41, M49, G3, G34, M5, M51, M54

working papers series